CHICOPEE, Mass. (WWLP) – With the 2023 tax season just getting started, there is a concern for an increase in tax scammers.
The Identity Theft Tax Refund Fraud Information Sharing ISAC Mission and Analysis Center (ISAC) 2022 annual report reported difficulties during tax filing season 2022. It has become increasingly common for thieves to file fraudulent claims and take advantage of programs established through pandemic-related legislation related to tax refunds. This is reflected in attacks from every possible vector using stolen identity information and mounting elaborate tax returns.
The ISAC platform’s users’ ability to detect schemes early and share industry information quickly has never been more important. Through the ISAC many taxpayers were protected from financial losses and damage from new alert schemes. Identity theft tax refund fraud, as well as other attempts to steal from the tax system, are partners that will not go away. Though many successes have been achieved, the number of attacks is large and growing, both in terms of volume and sophistication, and has spread to other business sectors, such as supply chain attacks and social media scams.
The report found that eight million tax forms appeared suspicious in 2022, up from two million in 2021. 22News spoke to an expert on why there has been an increase in people that have experience identity theft. “That really has to do with what is happening in the world around us. And how we safeguard our documents, and what kind of software we are using,” said tax expert Ray Liberty of Liberty Tax. “You want to treat your documents like its cash, if it were laying around somebody is going to take it.”
Liberty adds, “stolen identities increase because there are more frequently more bad guys out there and they are really good at it. So, as fast as your internet provider or your software provider can produce solutions, they’re right on top of it. Creating ways to get your personal information, and get to your data. So it’s a contest between the two parties. “
The ISAC developed a five-year strategic plan, from 2022 to 2027, to combat tax refund fraud and identity theft.
For now, the IRS says these are all the common scams to be on the lookout for as you file your taxes.
- Pandemic-related email scams
- Phone scams, callers claiming to be IRS employees, using fake names and bogus IRS identification badge numbers
- Beware of promoters claiming their services are needed to settle with the IRS
- Parents, families, and others should be mindful of the potential dangers in sharing devices at home, shopping online, and using social media.
- Fraud and cybercrime that affects charities
- Internal Revenue Service warned of an ongoing IRS-impersonation scam that appears to primarily target educational institutions.
- Scammers claim to be able to suspend or cancel the victim’s SSN. It’s yet another attempt by con artists to frighten people into returning ‘robocall’ voicemails.
- If received unemployment benefits, in some cases, criminals sought to exploit the situation, filing for fraudulent unemployment benefits using stolen identities.
- Criminals and scammers try to take advantage of the generosity of taxpayers who want to help victims of major disasters.
- Cautious of IRS impersonation scam campaign in emails
- Criminals fake calls from the Taxpayer Advocate Service
- Avoid unethical tax return preparers, known as ghost preparers
- The surge of fraudulent emails impersonating the IRS and using tax transcripts as bait entices users to open documents containing malware.
It’s important to remember that tax scams also continue year-round and you should take necessary precautions. If you’re doing a tax return online at home, Liberty recommends using strong passwords, two-factor authentification, and computer firewalls. An Identity Protection PIN (IP PIN) can also be used, to prevent someone else from filing your tax return, in which you and the IRS will only access.
All professional tax preparers will have controls in place around their systems to make sure personal identity is protected. “If there is a situation, where you get a letter from the IRS you didn’t expect or you get a notice from them that says somebody has already filed your return, make sure you are on top of it, you’re not ignoring it, and that you deal with it,” Liberty says.
The deadline to file taxes is by April 18th this year.